WASHINGTON, D.C.— Dennis Kelleher, President, CEO, and Co-founder, issued the following statement in response to President Trump’s Acting FDIC Chair Travis Hill and the FDIC Board’s irresponsible action to dismantle six rules that protect Main Street Americans and the banking system.

“For more than 90 years, the FDIC has been the gold standard in protecting Americans’ savings, the banking system, and the economy from banking crashes and disasters. That’s because it has consistently prioritized its mission of protecting consumers’ money and safeguarding the more than 4,500 banks that are vital to every city and town across America.

“Unfortunately, Trump’s Acting Chair Hill has wasted no time with his deregulatory agenda, taking sweeping actions that endanger those banks and the savings accounts of Americans. Proving that their actions could not withstand the scrutiny of the light of day, Hill and his fellow deregulators took these actions in secret, with no public notice, meeting or discussion, just a notational vote, as if they had something to hide. This should alarm anyone with a savings or checking account, any money in U.S. banks, who depends on FDIC insurance, or who is interested in preventing bank failures, financial crashes, and bailouts for bankers.

“The FDIC Board took six deregulatory actions that will endanger depositors, banks, and financial stability:

1. It stopped a rulemaking that would have reduced destabilizing “hot money” movements in and out of banks (called brokered deposit protections). Prioritizing crypto and fintech firms’ profits over depositor and bank protections, the FDIC said the rule “would have significantly disrupted many aspects of the banking landscape”—that is true because it would have closed dangerous loopholes that allowed banks to accept hot money deposits, which increases risks and vulnerabilities to bank stability.
2. It stopped a rulemaking to reduce the dangers created by excessive and high-risk incentive-based compensation schemes, which was intended to prevent bank executives from putting their interests in pocketing big bonuses at the expense of the bank’s stability and depositors’ savings. Unsurprisingly, the FDIC gave no reason for this decision.
3. It stopped a rulemaking that would have increased bank board and management accountability. That—the utter lack of accountability for bank board members and executives—is a major reason why bankers take too much risk, endanger their banks, and cause failures that lead to bailouts. The FDIC said the rule “would have created . . . overly prescriptive and process-oriented expectations” for bank boards and management, but actually it would have implemented necessary and very long overdue guardrails for the boards and management at the largest banks in the country.
4. It stopped a rulemaking that would have implemented necessary checks and balances for bank changes in control. This rule would have allowed the FDIC to protect depositors and the deposit insurance fund when other bank regulators considered changes in control transactions for the largest banks, which have consumer protection and financial stability risk, including those involving large investment fund managers.
5. It is rescinding a policy that strengthened bank merger While the current policy was not perfect, it had implemented necessary regulatory procedures to assess whether mergers were in the best interest of consumers, competition, and financial stability.
6. It delayed the implementation of a key final depositor protection rule that requires banks to provide clear signs of deposit insurance to bank customers. Abuse of the FDIC sign and false claims of deposit insurance by nonbanks and crypto firms have been rampant and have harmed countless consumers who thought their deposits were protected by FDIC insurance when they were, in fact, not protected. This delay in compliance until 2026 for a rule that was finalized in 2023 will only allow more consumers to be misled and tricked by deceptive claims of deposit insurance, particularly on digital platforms.

“Bank depositors, taxpayers, and all Main Street Americans deserve better from FDIC leadership. Unfortunately, instead of focusing on better consumer protections and financial stability, Acting Chairman Hill is focused on implementing an ideological pro-industry, deregulatory agenda.”

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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.